Bell Air Mansion flops at auction after being listed for $ 87.8 million

An over-the-top modern palace at Bell Air has been listed for নি 87.8 million for an auction this week. But according to homeowner, dermatologist-turned-developer Alex Khadavi, the highest bid was just under 45.8 million.

“Terrible, terrible, terrible!” This is how Khadavi marked the auction results on CNBC. He applied for Chapter 11 bankruptcy protection two weeks after the home was put on the market last year.

Despite a stealth DJ booth rising from the floor of the living room by Hydraulics, a gallery of black marble-clad cars and a glass hanging over the fountain and glamorous amenities like marble bridges, the auction of luxury Los Angeles neighborhoods has failed. To meet the $ 50 million reserve, Khadavi will provide the least amount of entertainment.

“No one told me that this thing was going to go down, down this level,” he said.

Dr. Khadavi is sitting on a DJ booth rising from the floor of his special home in Bell Air.

Joe Bryant

According to the court filing, Khadavi – who owed several million dollars to several creditors – hoped the auction would raise the sale price substantially to pay off his debts. But the doctor told CNBC that he was not happy that the auction, which ended Monday evening, matched the big drop in both equity and crypto.

Khadavi added that he believes the auctioneer, his agreement with Concierge Auctions, prevented the company from starting bidding under the reserve price. So when the five-day auction began, he was shocked to see the auction house agree to consider starting a $ 10 million bid below the minimum price. The seller believes that the lower starting point than expected sets the stage for what happened next.

Bids came in at a slower pace and the highest bid was accepted on the last day of the auction, dropping it to about $ 4.2 million less than the reserve. The final offer of $ 46.8 million was not received before the auction closed.

A screen grab the auction results from Khadavi’s mobile phone.

Alex Khadavi

Concierge Auction had no comment on why Khadavi was confused about why the bid started below his reserve. The auctioneer will not disclose how many bidders actually bid. But the company’s president, Chad Raffers, made the statement via email:

“After an enthusiastic auction, the bidding has stopped and the high bid is in the hands of the trustees. With over 80 eligible performances in the last 60 days, we are confident that the market price has been delivered.”

A glass and marble bridge overlooks the living room and leads to the owner’s wings.

Mark and Tiffany Angeles / Aaron Kirman Group

Normally, a seller does not need to accept a bid below the reserve price, but the auction of Khadavi’s property, located at 777 Sorbonne Road, is a bit more complicated because it is part of the bankruptcy process. Khadavi told CNBC that the court would consider the highest existing offer of the house in early June and if it was approved, the sale would go ahead whether he liked it or not.

Khadavi is now in the process of finding an offer that exceeds the top bid in the auction, and he says he is considering legal action against the auctioneer for calling the auction “faulty.”

“Honestly, I’m not happy,” said Aaron Kirman, co-listing agent at Compass. “We wanted more.”

But Kirman said he did not believe there were errors in the auction. “At the end of the day, the highest bidder is the highest bidder,” said the agent, who has been involved in several luxury real estate auctions.

It is not uncommon for high-assets that have been sitting in the market for a long time before going to auction to lose about 50%. Based on a recent CNBC review of the ultra-luxury auctions, the top four palaces sold at auction saw their actual inquiries cut by 68% or more.

According to the auctioneer’s website, the Bell Air Agreement will include a court-approved 5% auction fee, to be paid by the buyer. That would bring the current property offer to just 48 million. If approved by the sales court, the palace will be the fourth most expensive house to sell at auction.

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